LM Legal Services Blog

Representatives of the Bulgarian Chamber of Construction have had a fruitless meeting with managers from the leading Bulgarian banks. The developers have informed the bankers that construction projects exceeding 2 billion levs have been stopped. According to information of the chamber in 2008 the number of the new planning permissions have decreased by 20%.  The situation of the projects which have been already started but their developers do not have money to complete them is most alarming.  Although there are many shopping malls and business centres among the projects put on hold, there are also apartment buildings where most or all apartments have been sold off-plan to buyers who took mortgages. The owners of such kind of properties are in dire straights as they can not use them -  the buildings where the properties are situatied can not acquire permission to use (Protocol 16) in the foreseable future.  Deadlines have been missed.

The response of the bank managers was that now banks can only rely on the personal savings and on the budget and ignored warnings that they might also suffer from the recession and told the developers to manage on their own.